Mergers and acquisitions are very common in today’s commercial landscape. It’s important to understand the basics involved so that if you’re considering a merger or an acquisition, you don’t miss any crucial steps. Here’s an overview of what’s involved.
Why Merge With Or Acquire Another Company?
Mergers and acquisitions are among the most effective ways to expedite the implementation of a plan to grow rapidly. Companies in all industries have grown at lightning speed, in part because of an aggressive merger and acquisition strategy. The impact of technology and the Internet has only further increased the pace and size of deals. Buyers of all shapes and sizes have many of the same strategic objectives—to build long-term shareholder value and take advantage of the synergies that the combined firms will create—but each industry has its own specific objectives. Read more at Entrepreneurship…
Mergers and acquisitions have taken on a new dimension thanks to technology. The search for new products and ideas, as well as additional market share and strategic relationships are some of the reasons why technology companies, for instance, decide to come together.
The defense industry has also benefitted from mergers and acquisitions by taking advantage of the resources of the private industry. Pharmaceutical companies have also jumped on this bandwagon to pull together research and development resources and deliver more products to the market.
Merger Or Acquisition?
Mergers and acquisitions (M&A) and corporate restructuring are a big part of the corporate finance world. Wall Street investment bankers routinely arrange M&A transactions, bringing separate companies together to form larger ones. A merger is a combination of two companies, an acquisition is where one company buys another.
These actions often make the news. Deals can be worth billions of dollars. They can dictate the fortunes of the companies involved for years to come. For a CEO, leading an M&A can represent the highlight of a whole career. Read more at Investopedia…
Understand The Complexities
Mergers and acquisitions are huge growth opportunities and any company CEO or top executive going through an M&A will tell you it isn’t easy to navigate and negotiate all the details. This is why it is so important to get an experienced law firm to handle all the details of the M&A. This also ensures both sides are getting a fair deal.
One of the most complicated steps in the M&A process is properly structuring the deal. There are many factors to be considered, such as antitrust laws, securities regulations, corporate law, rival bidders, taxes, accounting issues, contacts, market conditions, forms of financing, and specific negotiation points in the M&A deal itself. Important documents when structuring deals are the Term Sheet (used for raising money) and a Letter of Intent (LOI).
Some of the main steps of a merger and acquisition include:
- Develop an acquisition strategy.
- Set the M&A search criteria
- Search for potential acquisition
- Begin acquisition planning
- Perform valuation analysis
- M&A due diligence
- Purchase and sale contracts Financing strategy for the acquisition
- Financing strategy for the acquisition.
- Closing and integration of the acquisition. Read more at Corporate Finance Institute…
These are the basic steps involved in any merger or acquisition, and a successful M&A will most likely involve all or most of them. It really cannot be overstated how critical it is to hire the right lawyer for the job. To find one with experience and expertise in the Charlotte metro area, look no further than Meek Law Firm. We will walk you through the entire process and make sure you get the best out of the deal. Get in touch with us today at (704) 848-6335. We look forward to speaking with you.